SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of SONAECOM TAKEOVER OF PORTUGAL TELECOM (B)
Most management teams are caught off guard when their company becomes the target of a takeover. However, P's management team had seen it all from the other side before and knew just what to do. They viewed this challenge professionally. After declining the a‚¬9.50 bid, Portugal Telecoms board formed a special committee to lead the defense strategy. However, the board also confirmed it was not saying no to a deal: We wo't defend at any price. We will do what is right for shareholders, stated Zeinal Bava, P's CFO.
Swot Analysis of "SONAECOM TAKEOVER OF PORTUGAL TELECOM (B)" written by Nuno Fernandes includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that P's Portugal facing as an external strategic factors. Some of the topics covered in SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) case study are - Strategic Management Strategies, Financial management, Mergers & acquisitions, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) casestudy better are - – wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, increasing commodity prices, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs,
digital marketing is dominated by two big players Facebook and Google, technology disruption, etc
Introduction to SWOT Analysis of SONAECOM TAKEOVER OF PORTUGAL TELECOM (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the P's Portugal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which P's Portugal operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) can be done for the following purposes –
1. Strategic planning using facts provided in SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) case study
2. Improving business portfolio management of P's Portugal
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of P's Portugal
Strengths SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of P's Portugal in SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) Harvard Business Review case study are -
Ability to recruit top talent
– P's Portugal is one of the leading recruiters in the industry. Managers in the SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of P's Portugal
– The covid-19 pandemic has put organizational resilience at the centre of everthing that P's Portugal does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– P's Portugal is one of the most innovative firm in sector. Manager in SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– P's Portugal has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For P's Portugal digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. P's Portugal has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that P's Portugal has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Sustainable margins compare to other players in Finance & Accounting industry
– SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) firm has clearly differentiated products in the market place. This has enabled P's Portugal to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped P's Portugal to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of P's Portugal in the sector have low bargaining power. SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps P's Portugal to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of P's Portugal in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– P's Portugal has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Finance & Accounting field
– P's Portugal is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled P's Portugal in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) are -
High cash cycle compare to competitors
P's Portugal has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B), it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) can leverage the sales team experience to cultivate customer relationships as P's Portugal is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract P's Portugal 's lucrative customers.
Low market penetration in new markets
– Outside its home market of P's Portugal, firm in the HBR case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– P's Portugal has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B), in the dynamic environment P's Portugal has struggled to respond to the nimble upstart competition. P's Portugal has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, P's Portugal has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Lack of clear differentiation of P's Portugal products
– To increase the profitability and margins on the products, P's Portugal needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, P's Portugal is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though P's Portugal has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) should strive to include more intangible value offerings along with its core products and services.
Opportunities SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) are -
Building a culture of innovation
– managers at P's Portugal can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects P's Portugal can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– P's Portugal has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help P's Portugal to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– P's Portugal can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for P's Portugal in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of P's Portugal has opened avenues for new revenue streams for the organization in the industry. This can help P's Portugal to build a more holistic ecosystem as suggested in the SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) case study. P's Portugal can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help P's Portugal to increase its market reach. P's Portugal will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, P's Portugal can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, SONAECOM TAKEOVER OF PORTUGAL TELECOM (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– P's Portugal can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for P's Portugal to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. P's Portugal can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. P's Portugal can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. P's Portugal can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, P's Portugal can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, P's Portugal can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of P's Portugal business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. P's Portugal will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Stagnating economy with rate increase
– P's Portugal can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Consumer confidence and its impact on P's Portugal demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B), P's Portugal may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for P's Portugal in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of P's Portugal
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of P's Portugal.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of P's Portugal.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for P's Portugal in the Finance & Accounting sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– P's Portugal has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, P's Portugal needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of SONAECOM TAKEOVER OF PORTUGAL TELECOM (B) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that P's Portugal needs to make to build a sustainable competitive advantage.
